The Ethereum price is exchanging hands at $2,237 as of 1:30 a.m., down 5.78% over the last 24 hours.

ETH experienced a 13% drop on Jan. 3 as its price dropped from a high of $2,385 to $2,100 within two hours, levels last seen in early December 2023.

The flash downswing resulted in liquidations of more than $100,000 worth of ETH futures, which were leveraged bets on the price increase.

The downswing has left traders debating the significance of the price correction with the Decilizer crypto community acknowledging that ETH had the most losses.

BIG DAY FOR $BTC 🔥
Grayscale is in talks with JPMorgan & Goldman Sachs for its Bitcoin ETF. Meanwhile, #Crypto hack losses dropped 51% in 2023, but Ethereum $ETH saw the most losses.
Security measures are improving, but the industry must stay vigilant. 🚨#Bitcoin #BitcoinETF pic.twitter.com/ZCFafTZTFG

— Decilizer (@decilizer) January 4, 2024

Is this the end of the bullish momentum for the largest altcoin by market capitalization? Note that Ether has tried without success to break above the $2,400 thrice over the last month alone. This is also the third time the smart contract’s token dropped toward the $2,000 zone over the same period.

The Jan. 3 marketwide sell-off appears to be triggered by an analysis report published by the digital assets platform Matrixport. The firm asserted that the SEC plans to reject the spot Bitcoin ETFs. Crypto prices crashed within an hour of the report’s release.

Can ETH reclaim the $2,300 Level?

The cause of the 13% flash crash on Jan. 3 may never be definitively determined. This does not necessarily invalidate Ether’s bull run or make gains above the $2,400 resistance less likely before the ETF decision.

For now, the bulls have to focus on reclaiming the $2,300 level. The long lower wick on Wednesday’s candlestick suggests that the buyers are aggressively defending teh $2,000 support level.

Increased buying from the current level could see ETH scale higher with the first target being a return to $2,300 and later the equal highs around $2,300. If this happens, it will indicate the ability of the buyers to confront resistance from the $2,400 major resistance.

ETH/USD Daily Chart

Supporting this bullish outlook was the upward-facing moving averages. Ether also sat on strong support on the downside. These were areas defined by the 50-day exponential moving average (EMA) at $2,182, the $2,000 psychological level, embraced by the 100-day EMA, and the 200-day EMA at $1,930.

The relative strength index (RSI) was also facing upwards, a suggestion that day traders had begun re-entering the market.

On the downside, failure to climb back above $2,300 would imply the inability of the buyers to sustain the uptrend. The bears would then pull the price toward the 50-day with the downside probably being capped around the $2,000 buyer congestion zone.